GameStop posted strong second-quarter results that were largely driven by its non-gaming businesses.
Net sales rose a modest 1.8 percent to $1.8 billion for the three months ended Aug. 1. But more telling, comp sales increased 8.1 percent worldwide and 10.8 percent in the U.S., and net income soared 34.6 percent to $33.1 million.
“Results for the second quarter again exceeded our expectations, reflecting the mix of sales in our market-leading video game business and the continuing success of our diversified segments,” said CEO Paul Raines.
Indeed, revenue from the company’s technology brands segment, which includes the Simply Mac and Cricket and Spring Mobile cellular chains, rose 62.3 percent. The gain was driven by the addition of 182 new stores, representing a 33 percent increase and making Spring Mobile AT&T’s largest authorized reseller.
As a result, sales within GameStop’s mobile and CE business rose 26.9 percent, the chain said.
By comparison, sales of new videogame hardware fell 2.2 percent, new software sales decreased 6 percent, and pre-owned sales were essentially flat, reflecting unfavorable currency fluctuations. Excluding the impact of currency rates, new hardware sales were up 3.7 percent, new software sales were up 0.7 percent and pre-owned sales rose 5.1 percent, as more used PS4 and Xbox One inventory became available. Pre-owned gaming products remain the largest piece of GameStop’s business, with 31.8 percent of total sales.
Raines said he expects greater momentum for his gaming business in the back-half of the year with the launch of several key titles.
Also driving GameStop’s results was the second-quarter acquisition of Geeknet/ThinkGeek, a seller of sci-fi and pop culture collectibles and gadgets, which drove a 37.7 percent increase in miscellaneous sales.
The company, the world's largest gaming specialty chain, currently operates 6,800 stores across 14 countries, including 72 Simply Mac stores, selling Apple’s full line of products and services; 69 Cricket stores selling AT&T pre-paid products and services; and 590 Spring Mobile stores, selling post-paid AT&T products and services.